Norway's $1 Trillion Fund Told To Sell EM Bonds

The video discusses a strategic overhaul of a $310 billion fixed income portfolio, focusing on cutting government and corporate bonds from emerging markets. The aim is to simplify the portfolio and increase equity exposure. The discussion highlights the limited diversification benefits of emerging markets debt, which often trades in tandem with risk assets. The strategy involves reducing exposure to certain currencies and selling bonds from countries like Mexico and South Korea. The goal is to minimize idiosyncratic risk and streamline investments without fully eliminating developed market corporate debt.

What rationale is given for selling bonds from countries like Mexico and South Korea?

What was the initial proposal regarding developed market corporate debt?